How to improve your customer loyaltyby using the right marketing channels

We all know the 4 Ps; right product, right price, right place, right promotion.

Customer loyalty is the 4 Cs; product continuity, competitive prices, convenient place and appropriate communication.

It’s the last element that will be the focus of this presentation – how using the right communication channel can improve customer loyalty.

This presentation is in 3 sections:

1. Understanding buyer behaviour2. Choosing channels that make customers feel valued 3. Realising the benefits of Human Interaction

How to improve your customer loyalty“ ”

There are two parts to the buying process; information and negotiation.

In the information phase (sourcing suppliers) buying behaviour has changed due to the internet.

Analysis of the Buyersphere Report 2011 shows the major sources of information for buyers are:

a) Suppliers website – 70%b) Web searches – 65%

The biggest increases in usage are:i) Online Events/Webinars – up 170%ii) LinkedIn – up 100%

Result of this online activity? Alternative suppliers are just a click away.

Understanding buyer behaviour“ ”

Buyers are also indiscriminate in the negotiation phase. SCi researched buyer loyalty when offered lower prices by alternative suppliers.

76% of buyers would change supplier if offered up to a 10% discount on a purchase of £2,000.

Understanding buyer behaviour“ ”

SCi asked 102 buyers the following question:

“You’re re-ordering an item for £2,000. What would make you use a new supplier?”

The options were a £1 discount, 5% discount, 10% discount or a £10 gift. Only 17% of respondents said they would reject the discounts and stay loyal.

Source: SCi Sales Group, 2011 n = 104

“ ”The reason for moving to a new supplier is largely driven by pressure on profits. The following is symbolic of the comments SCi received:

So buyers are fishing in a digital pool for suppliers to add to their short list, and the fish are easy to find.

Also, they are willing to use new suppliers for very little inducement – unless you can increase loyalty by making them feel valued.

Understanding buyer behaviour“ ”

“Our industry is all about best price, so even this amount (5%) might mean the difference between us winning or losing an order, hitting profit margins, etc.”

Choosing channels that make customers feel valued“ ”SCi conducted a survey about the relationship between marketing channels and the perception of being valued.

To avoid prejudice in their choice we phrased the question in a non-marketing format.

Over 600 Managers responded to the following question:

“It’s your birthday. Five friends congratulate you using different methods. Which friend values you most?”

Simon visits you at home (Field Sales)Heather gives you a telephone call (Telemarketing)Peter sends you a birthday card (Direct Mail)Sally sends you a text message (Mobile Marketing)Raj sends you an email (Email Marketing)

Choosing channels that make customers feel valued“ ”

Note how channels that use Human Interaction (HI) have performed best, while digital channels are perceived to value people least.

SCi asked managers the following question:

“It’s your birthday. Five friends congratulate you using different methods. Which friend values you most?”

Simon visits you at home (Field Sales)Heather telephones you (Telemarketing)Peter sends a birthday card (Direct Mail)Sally sends a text message (Mobile Marketing)Raj sends you an email (Email Marketing)

Source: SCi Sales Group, 2011 n = 609

Choosing channels that make customers feel valued“ ”It seems that valuing customers is linked to having a two-way, ‘live’ conversation (either face-to-face or over the telephone).

Here’s a comment from one participant in the survey:

In the above statement, a combination of Telemarketing, Field Sales and Direct Mail hit the spot. HI channels may make buyers and Managers feel valued, but they should be part of a multi-channel campaign.

“In the current iWarrior culture (completely connected w/techno toys) – any personal effort like a phone call or a planned personal visit would be my preference any day. We need to still make contact - even if for a brief conversation. The best scenario would be Simon calling up before coming home and bringing a birthday card with him!”

Realising the benefits of Human Interaction“ ”Beyond making customers feel valued, HI also has other benefits.

Another survey by SCi asked buyers if they had a telephone conversation or meeting before placing orders on their last 3 purchases.

Almost 70% of buyers had HI before making their purchasing decision.

But figures were more revealing when examining the size of order. The average order value with HI is £68,032, but with no HI it drops to £1,018.

This supports the theory that buyers like the reassurance they get from a telephone conversation or meeting before placing that big order.

Realising the benefits of Human Interaction“ ”Repeat orders demonstrate a customers loyalty to your product or brand, and according to SCi research 58% of repeat purchases had some form of HI.

Average order value with HI on repeat orders is £29,439, but without HI it drops to £3,407.

Because of the relatively low order value it may not be possible to have HI on every repeat order. But adding it to the mix at some point in the customer lifecycle has the benefit of making them feel valued, and the potential to increase order value.

Conclusion“ ”Buying behaviour has changed, the internet has made it easier to source new suppliers and change supplier the minute a better price is offered.

To keep customers loyal you need to show how much you appreciate their custom.

We react to different channels in different ways, and using channels with HI has the ability to add value to the relationship. In addition, it can build rapport on repeat orders and increase average order value.

Telemarketing or Field Sales should play a part in most B2B marketing – after all, it costs 5-10 times more to acquire new customers than keep existing ones.

www.scisalesgroup.com

Established in 2002, SCi Sales Group began life as a B2B telemarketing agency and has grown to become a leading sales acceleration specialist within EMEA.

We have added other offline/online marketing tools to our portfolio, and can act as an outsourced extension of your sales force or a supplier of insourced sales talent.

For further information, please visit our website or sign-up to our newsletter – www.scisalesgroup.com/contact